US pork exports set new annual value records

October was another excellent month for U.S. pork and beef exports, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Pork exports set a new all-time monthly value record at $573.9 million (up 41 percent from last year), which pushed the cumulative value through October to a new annual record of $4.93 billion – breaking the previous high of $4.88 billion in 2008 – with two months to spare.

Beef export value for October was $452 million, pushing the 2011 total to a new annual record of $4.49 billion. This is 37 percent ahead of the then-record pace established in the first 10 months of 2010.

“Establishing new annual value records just 10 months into the year is an extraordinary accomplishment, and one that the U.S. pork and beef industries should be very proud of,” said USMEF President and CEO Philip Seng. “Sustaining an aggressive export pace is critical for maintaining and creating American jobs and a positive balance of trade.”

October pork export volume second-highest ever, led by China, Japan, Canada
In addition to setting a new value record, pork export volume for October was also very strong at 200,725 metric tons – 24 percent higher than last year and the second-largest volume total ever. Through October, 2011 export volume is 17 percent ahead of last year’s pace at 1.8 million metric tons. October exports equated to 24 percent of pork muscle cut production and 27 percent when including both muscle cuts and variety meat. For January through October, these ratios were 23 percent and 27 percent, respectively, compared to 19 percent and 24 percent last year. October exports equated to $58.42 per hog slaughtered, bringing the 2011 total to $54.68. This compares to $42.26 in October 2010 and $43.72 for all of last year.

China was the largest volume market for U.S. pork in October at 48,678 metric tons, more than double the year-ago volume and setting another monthly record. Through October, exports to the China/Hong Kong region were up 60 percent to 361,690 metric tons, valued at $654.4 million (up 82 percent).

Strong October exports to Japan further solidified its position as the leading value market for U.S. pork. Through October, export volume to Japan reached 410,057 metric tons (up 14 percent over last year) valued at a remarkable $1.62 billion. This value total is 19 percent higher than last year’s pace and rapidly approaching a new all-time value record ($1.65 billion set in 2010).

Mexico is the top volume destination for U.S. pork, with October exports up slightly in volume over last year but 15 percent higher in value. This pushed the 2011 export totals to 429,926 metric tons (down 2 percent) valued at $830.6 million (up 4 percent). With a strong finish to the year, the all-time value record for Mexico ($986 million, set last year) could be within reach.

The volume and value records for Canada (in 2010, 183,068 metric tons valued at $618 million) are also likely to fall as strong October exports pushed its total to 168,828 metric tons valued $604.8 million – up 13 percent and 18 percent, respectively, from last year.

Exports to South Korea, which had already broken their previous records, remained strong in October reaching 161,118 metric tons (up 133 percent) valued at $418.1 million (up 182 percent). Exports to Korea have been bolstered this year by duty-free access for some imported pork cuts and a severe shortage of domestic product. Once the Korea-U.S. FTA is implemented, duties of 25 percent on the most commonly traded U.S. cuts will be reduced to 16 percent.

Free trade agreement
“The free trade agreement with South Korea, which should take effect in the first half of 2012, will expand our opportunities with this key trading partner,” said Seng. “It is important to keep in mind, however, that the business climate for imported pork in Korea has been exceptional this year due to FMD-related shortages and some degree of duty-free access. So the benefits of the FTA may not be reflected immediately, but will certainly help us over the long term.”

Another market topping its previous volume and value records was Australia, as 2011 exports reached 53,850 metric tons valued at $173 million – up 18 percent and 37 percent, respectively, over last year’s then-record pace.

Led by surging exports to Chile, the Central and South America region also topped last year’s record totals by reaching 58,050 metric tons (up 23 percent) valued at nearly $150 million (up 33 percent). The outlook for this region was also bolstered by ratification of the free trade agreements with Colombia and Panama, which hold great promise for U.S. pork.